Australian dollar falls to the lowest since the January flash crash
Soft Australian GDP sent AUD/USD below an important support line and down to the worst levels since the flash crash in early January.
This is starting to look like an ugly chart and a rough situation. Global growth isn’t exactly buzzing and there are signs of tension between China and Australia with coal shipments cancelled.
The real fear is Australian housing and consumers. The economy isn’t exactly buzzing and talk about RBA cuts continues to grow. If risk appetite takes a hit then we could get all the way back to the bottom of this chart.
Seasonally, I’ve noted the positive tailwind for AUD in March but that’s only one factor. Fundamentals are a much bigger one. Later we get trade balance for January and if it goes the way of today’s Canadian report, watch out for more downward pressure.